Ethereum Implements Dencun Upgrade to Reduce Transaction Costs on Layer 2s
The Ethereum core developers have successfully implemented the Dencun upgrade on the mainnet, bringing significant improvements to Layer 2 transactions. This upgrade introduces “blobs,” a new method that is expected to make Layer 2 transactions much cheaper for users. The Dencun upgrade, including the EIP-4844, was activated on the network at epoch 269568.
Introduction of Blobs for Layer 2 Rollups
With the Dencun upgrade, Ethereum Layer 2 rollups can now utilize blobs instead of the “calldata” method for posting transactions. This change directly leads to a reduction in fees and enables these savings to be passed on to end users. Blobs are designed to enhance Ethereum’s data availability without affecting the existing infrastructure, resulting in lower transaction costs on Layer 2 solutions such as Base, Optimism, Arbitrum One, zkSync, Starknet, and others.
- Blobs offer a direct path to fee reduction on Layer 2s.
- Savings from reduced fees can benefit end users.
- Blobs improve data availability without impacting current infrastructure.
In addition, a separate fee market for blobs will help maintain low transaction costs for Layer 2 solutions even during periods of high network congestion. While some Layer 2 chains plan to integrate blobs immediately, others may take some time to adopt this new method.
Other Improvements Introduced by Dencun
The Dencun upgrade includes eight other code updates that bring further enhancements to Ethereum:
- EIP-4788: Introduces an “enshrined oracle” to improve communication between Ethereum’s execution layer and consensus layer.
- EIP-1153: Focuses on “transient storage,” a necessary feature for the upcoming launch of Uniswap version 4.
Hot Take: Dencun Upgrade Enhances Ethereum’s Scalability
The implementation of the Dencun upgrade on the Ethereum mainnet marks an important milestone in improving the scalability and cost-effectiveness of Layer 2 transactions. The introduction of blobs as a new method for posting transactions directly addresses the issue of high fees on Layer 2 solutions, benefiting end users by reducing their transaction costs. By enhancing data availability without impacting existing infrastructure, Ethereum can continue to support a wide range of Layer 2 solutions while maintaining low transaction costs even during periods of network congestion.
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